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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2015-06-16 Daily Xml
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Ministerial Statement

Alinta Energy

The Hon. J.W. WEATHERILL (Cheltenham—Premier) (14:03): I seek leave to make a ministerial statement.

Leave granted.

The Hon. J.W. WEATHERILL: On 11 June 2015, Alinta Energy announced its decision that its Flinders Operations in Port Augusta, the Northern and Playford B power stations and Leigh Creek mine would not operate beyond March 2018, as its continued operation had become increasingly uneconomic. Alinta also announced that its operations could cease before March 2018.

The recent closure of coal-fired power stations in New South Wales and Victoria illustrates the difficulty these assets have competing in the energy market. While there has been an expectation the power stations will close once the coalfield was exhausted, this sudden announcement was obviously upsetting for all those affected. Our first priority as a government is the welfare of the workers and their families, who will undoubtedly be disappointed by this decision. Our thoughts are with them at this stressful time.

It is widely acknowledged that Alinta's decision is through no fault of the workers; it is due to forces beyond their control. The workers throughout the Flinders Operations have done all they could do to maximise efficiency, and they can be very proud of their efforts to keep the operations competitive for so long in the face of irresistible market forces.

Many workers and their families have been in Leigh Creek for decades. They are an important part of the development of South Australia and are rightly proud of all that they have achieved. Yesterday, the Minister for Manufacturing and Innovation and the Minister for Regional Development travelled to Leigh Creek and those sentiments were echoed by the community. They visited the mine site, met with workers and the Leigh Creek Progress Association. Minister Maher also met Alinta staff, workers and union representatives at the Northern Power Station in Port Augusta. Minister Brock travelled with the Outback Communities Authority to meet with locals in Copley, Lyndhurst and Nepabunna, and he remains in the region today. I will also be visiting the region in coming weeks.

Many in these local communities saw this closure coming but were disappointed that the closures were happening sooner than had been expected. Our intention is to make the transition for workers to new jobs and opportunities as smooth as possible. However, I am told both ministers were encouraged that many people in the communities they visited also saw the potential for new opportunities that would create jobs.

We also want to work with the township of Leigh Creek and the surrounding communities to determine their future following the closure of the coalmine. Following Alinta's decision, the state government immediately established an Upper Spencer Gulf and Outback Community Engagement Team to provide support and advice to the region's communities, and team members were on the ground in Leigh Creek and Port Augusta the day after Alinta's announcement.

We have also established a 1800 number (1800 294 446) to provide assistance and advice to Upper Spencer Gulf and outback communities. The state government has already announced $1 million in initial support and we are in discussion with the commonwealth government about the support they are able to provide. Alinta have also advised that employees will receive their full entitlements and the company will provide additional support services to assist during this transition.

I want to assure South Australians that the decision to close the power stations at Port Augusta is unlikely to affect the cost or reliability of electricity supply in this state. Recent experience has shown the national energy market can cope without the power generated at Port Augusta, with both Playford B and Northern power stations withdrawing from the market due to oversupply.

Investment in renewable energy in this state, as well as improved connectivity with the Victorian market through an upgraded Heywood interconnector, provides further assurance that the high level of reliability that South Australians expect can be maintained. In the days, weeks and months ahead, we will be supporting the workers and the Upper Spencer Gulf and outback community as required, including working constructively with the member for Stuart, who has already made a number of helpful suggestions to the government about how we might support affected communities. The government will also be talking to industry about possible alternative uses for some of the assets, including the coalfields and the rail link between Port Augusta and Leigh Creek.

Finally, the Department of Treasury and Finance along with the EPA will be working to ensure Alinta Energy meets all of its obligations to remediate and rehabilitate the power station assets and coalfields, as well as providing its workers with their rightful entitlements.

Mr Pederick: So it's alright if you're mining coal in Victoria.

The SPEAKER: The member for Hammond is called to order.

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